Friday, June 5, 2015

Monopoly: Not Just a Board Game

John D. Rockefeller and Andrew Carnegie are two business icons from the late 19th and early 20th centuries. In class we have been learning about their impacts on American economy and business. We were discussing whether the impacts were positive or negative and in my opinion, while they were alive and in business their impact was negative but their influence in modern times is positive.

Rockefeller and Carnegie became very wealthy using many strategies to work their way to the top of the economy and gain monopolies over multiple industries. Rockefeller had a prominent role in the oil industry and was able to buy up most oil companies that weren't doing well after the war. He used horizontal integration, which is when a company buys out competitors that have similar production, by lowering prices until competitors couldn't match his. This helped him create his monopolies. Carnegie was prominent in steel manufacturing and was able to produce higher quality steel with lower prices. He developed his monopoly by using vertical integration. This is when a company controls other companies with different stages of production that would normally be separately run. This way he could make profit off of each stage of production without having to giving money to other companies to supply him. These were negative because monopolies created a very uneven balance of power and will often be fueled by greed. In order to prevent uprisings and keep the country working together and happy, power should be distributed more equally. Rockefeller and Carnegie were taking opportunites away from other people to succeed and acquiring an unfair amount of power for themselves, even if they may have had good intentions.

Rockefeller and Carnegie's influence on modern business is significant and more positive. They introduced many useful strategies in business that can help people succeed. The reason this is not negative and will not result with the same uneven balance of power is that people saw that it was not fair and now there are ways of preventing it from happening. Back then the government was in laissez-faire capitalism, which means that they would not control the economy and would leave it to the big businesses, allowing monopolies to occur. Now the government has more control over it. Their monopolies showed people that it should not happen again so now a more equal balance of power is protected more. People will be able to use their business strategies without gaining too much control. Rockefeller and Carnegie's actions at the time may have been negative but they had a positive effect on business today.